Sinopec achieves sound operational results (China)

China Petroleum & Chemical Corporation (Sinopec) announced its interim results for the six months ended 30 June 2012.

 

Financial Highlights:

 

 In accordance with the PRC Accounting Standards for Business Enterprises (“ASBE”), in the first half of 2012, the Company’s turnover and other operating revenues was RMB1,348.1 billion, up 9.3% over the first half of 2011. Net profit attributable to shareholders of the Company was RMB23.7 billion. Basic and diluted earnings per share were RMB0.273 and RMB0.263 respectively. 

 

 In accordance with the International Financial Reporting Standards (IFRS), in the first half of 2012, the Company’s turnover and other operating revenues was RMB1,348.1 billion, up 9.3% over the first half of 2011. Operating profit decreased by 31.4% to RMB40.1 billion. Net profit attributable to shareholders of the Company was RMB24.5 billion, basic and diluted earnings per share were RMB0.282 and RMB0.272 respectively. 

 

The Board of Directors declared an interim dividend of RMB0.1 per share (tax inclusive).

 

Business Highlights:

 

Exploration and production segment: Sinopec achieved satisfactory operation performance due to the increased prices and sales volume of crude oil and natural gas. Crude oil production increased year-on-year by 4.3% to 163.09 million barrels. Natural gas output grew 14.1% to 289.78 billion cubic feet. The segment’s operating revenue increased year-on-year by 12.0% to RMB126 billion, and operating profit, by 16.8% year-on-year to RMB40.5 billion. .

 

Refining segment: Refinery throughput was 110 million tonnes in the first half of the year, representing a year-on-year increase of 1.1%. The segment’s operating revenue rose 7.2% year-on-year to RMB638.6 billion. Nevertheless, the crude oil price increased significantly while domestic refined oil product prices were strictly regulated; hence the segment suffered an operating loss of RMB18.5 billion.

 

Marketing and distribution segment: Sinopec adjusted operation strategies to actively respond to the changing market demand. In the first half, the total sales volume of oil products increased to 82.67 million tonnes, up by 2.8% year-on-year. The marketing and distribution segment’s operating revenue increased 8.4% year-on-year to RMB710 billion and its operating profit was up 3.3% from the same period of 2011 to RMB20.3 billion.

 

Chemicals segment: Production of ethylene was 4.81 million tonnes in the first half of 2012, down by 4.1% year on year. The total sales of chemical products were 26.15 million tonnes, up by 4.2% year on year. Due to the depressed chemical market and drastic fall in prices of major chemical products, the chemicals segment recorded operating revenues of RMB200.8 billion and suffered an operating loss of RMB1.3 billion.

The first half of 2012 witnessed an economic slow-down in the United States, the debt crisis and consequent recession in Europe, and slower growth in China and other emerging markets. The international price of crude oil rose and then dropped in the first half of 2012. The domestic market for refined oil products was well supplied; however the price regulation on domestic refined oil products is tight and is misaligned with the international crude price. The chemicals market saw intense competition, leading to a drastic drop in products prices. In the second half of the year, the Chinese government is expected to implement a number of fiscal and monetary policies in pursuit of steady economic growth, driving infrastructure investment and domestic consumer spending. Given these macro-control policies to be in place in the second half of 2012, Sinopec expects the domestic demand for refined oil products and chemicals will steadily increase, which provides favorable conditions for the Company to scale up business operations.

 

Mr. Fu Chengyu, Chairman of Sinopec commented, “In the first half of 2012, the volatile economic environment, both internationally and domestically, brought challenging operating conditions. That Sinopec managed to maintain our overall growth momentum is thanks to our vertically integrated business model and fast response. Looking ahead, Sinopec will monitor closely the macro-economic situation, improve the efficiency of our production operations, reinforce production safety, and ensure effective cost control, in order to maintain a solid foundation for the sustainable development of our business.”